Not upheld: wrongful termination of hire purchase agreement complaint against BMW Financial Services (GB) Limited

Decision detail

Summary

Mr I acquired a car via hire purchase agreement with BMWFS in December 2023 for £109,575 with monthly repayments of £2,081.37. From February 2024, Mr I fell into arrears and despite receiving multiple Default Notices and a partial payment in August 2024, arrears escalated to over £10,000 by January 2025 when BMWFS terminated the agreement. Mr I complained that termination was unfair, citing ill health, and sought either a full refund or reinstatement of the agreement. The ombudsman found BMWFS acted fairly in following their contractual rights and proper procedures, and considered the £500 compensation offered for poor communication to be appropriate.

The Ombudsman's reasoning

The ombudsman found that the hire purchase agreement terms clearly set out the consequences of non-payment, including termination and repossession. BMWFS followed proper procedure by issuing Default Notices and allowing time for payment before terminating the agreement. The ombudsman noted that while sympathetic to Mr I's ill health, this does not negate his contractual obligations to make payments while benefiting from use of the car. The ombudsman considered the £500 compensation for poor communication to be fair and proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website